PE Firms Seek ‘Holy Grail’ Leadership

February 14, 2017 – Based on the explosive growth and future expansion possibilities within the life sciences and healthcare fields, venture capital and private equity firms are putting investment capital to work. What’s caught their eye, say recruiters, are two things: disruption and innovation. Both shifts require people and senior leaders to oversee them.

As new companies are formed across both sectors, the landscape for top talent has grown exceedingly competitive. Companies want experienced people who not only believe in the science, but can also put their personal stamp on it. And, of course, while they also need senior talent who believe in and are driven by an organization’s mission, finding leaders who can also keep a keen eye on the bottom line is becoming the holy grail of most headhunting commissions.

Competition is Keen

“VC and PE firms require seasoned executives for their portfolio investments who have been there and done it before,” said McDermott & Bull managing director Rod McDermott. “They are looking for operational CFOs who can be a strategic partner to the CEO and instrumental in the strategic direction of the business.”

He said there is always a supply issue for what he calls the top 10 percent of talent that his firm’s investment partners are looking for when bringing on a new C-level person. “They are looking for an experienced executive who has VC or PE experience and has been through a successful exit.”

According to Klein Hersh managing partner Josh Albert, two forces have converged to create an unprecedented wave of investment in healthcare and life sciences. This is driving a dramatic rise in the formation of emerging biotech and pharmaceutical companies. The first is the creation of new funds to invest in the next wave of innovation. The second is the investment in companies which provide newer primary care models combining more personalized care delivery and smart technology to enhance the patient experience.

This new fund creation comes at a time when there is bold scientific activity happening across the public and academic sectors, with cutting edge research in small molecules, biologics, and gene therapy. “The result is a robust market for investment,” said Mr. Albert.

Robust Market for Leadership

And an even more robust market for leadership. Mr. Albert said investment firms want leaders who share their passion and the opportunities it offers. They want team players who focus and work and rally their troops toward a common vision. “As a result, they are willing to offer the mentorship that many new leaders are seeking and provide opportunities that address candidates’ personal, professional and financial needs.”

“In the startup world, the rise of patient engagement companies, digitization, analytics, telemedicine, and genomics are all driving the need for medically competent business leaders who understand clinical outcomes and workflows, technology, patients, and ultimately consumers,” said Jim Utterback, managing director of Horton International North America.

But the most common searches conducted are for top C-suite positions within an organization, including CEOs, CFOs and COOs. Usually, when an investment is made in a company, the investment firm will look to do a CFO search almost immediately.

The types of positions being filled varies greatly from one venture group to another. What they have in common, however, is one singular goal: to find senior leaders who can come on board and add value quickly. They want people who can share in the collective vision and the path forward. “PE firms are usually looking at a short window of three to five years and so they want executives who understand the cadence and pace at which private equity moves,” said Mr. McDermott.

“The demand for executives versus available supply is high relative to market ready and available talent,” said ZRG Partners managing director Brian McGowan, who specializes in global healthcare searches. “We are very active recruiting CEO and CFO executives of newly acquired investments. In addition to our C-suite projects, we are also getting increased requests to help build out the commercial and go-to-market capabilities of newly acquired portfolio companies.”

With plenty of money available and being put to use in what have become aggressive investment activities, luring and recruiting top executives has become difficult business. “The high cost of acquisition of new businesses is placing greater pressure to have the ‘best’ talent leading those organizations,” said Mr. McGowan.